New IDC Report Shines Light on Middle Management Costs and Challenges

Effective and efficient middle management is one of the biggest challenges facing manufacturing and other organizations today. Driven by the explosion of data and increasing demands for faster decision-making cycles, the need for middle managers is a critical concern for senior management. International Data Corporation (IDC) has published a new report, Middle Management and the Future of Operations (IDC #US46985920), that examines the impact of artificial intelligence (AI) on decision making and why organizations must embrace digital engineering and encourage resilient operations.

“Every company wants to make better decisions in a faster time frame. Middle management is the link that connects executives to individual workers,” said Kevin Prouty, group vice president, IDC Manufacturing and Energy Insights. “However, this group can make only a limited number of effective decisions at the same time. To keep up with the rapid pace of change organizations need to rethink this approach. AI-based automation and digital engineering will be key pieces to transform the operational decision-making process.”

IDC has identified five key reasons organizations should consider evolving their traditional operations and management structure:

1. Slow and incomplete information flow to decision-makers – It can take days, weeks, and even months for the information needed for senior decision makers to make its way up through layers of staff who each must collate, analyze, and interpret the data.

2. Slow response once decisions are made – Once the data is collated into actionable information, orders or tasks must then make their way down to that same middle management layer.

3. Biased and misinterpreted information – Information on the way up has to pass through several organizational layers with biases shaped by personal goals, KPIs, and incentives.

4. Timeliness of decisions – All that up and down activity means that by the time the decision reaches the point of activity, there is a good chance the decision is obsolete.

5. Creating silos of information – Middle managers tend to create or reinforce siloes in the organization and unintentionally limit free collaboration.

By 2030, IDC believes that the middle management layer of large organizations will begin to compress as the pool of suitable candidates declines. Effective middle managers must have a unique combination of detailed domain expertise, creativity, charisma, and ambition. These traits are difficult to find in combination, especially for operational organizations, which struggle with skill gaps and declining interest among younger workers. With fewer qualified workers available, the middle management layer will eventually thin to just a few people managing a highly structured decision-support system.

New Digital Engineering functions will be integral to successful digital transformation within organizations. IDC describes Digital Engineering as an operation based on resilient decision making that is driven by customer and market activity. The core of the new organization is senior decision-makers sitting within an AI-driven decision-making framework fed by business and market information from IT and operational information from Digital Engineering.

To learn more about IDC’s Future of Operations framework and the Digital Engineering organization, please download the new IDC eBook: https://bit.ly/36FuctW

The IDC report, Digital Engineering and the Future of Operations (IDC #US46217020), reviews in detail the role of resilient decision-making in the Future of Operations, introduces the IDC concept of Digital Engineering, and outlines steps to reaching Digital Engineering maturity. Organizations ready to move forward in building their digital engineering house can look to the IDC report, Future of Operations: Building the House of Resiliency (IDC #US46188320).

About IDC’s Future of Operations Practice

IDC’s Future of Operations research practice helps organizations build resilient decision-making with the core goal of unifying operational data streams with data from the rest of the enterprise. New converged IT/OT organizations, which IDC refers to as Digital Engineering (DE), will facilitate the transformation to Industry 4.0 and ensure that data and systems are available to support resilient decision-making.

To learn more about all nine of IDC’s Future of X research practices, please visit https://www.idc.com/FoX

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world’s leading tech media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.